There is a long list of potential “reckless” acts that could exclude someone from being covered by their health insurance. There are gray areas, too. Whether a person is granted coverage can depend on the circumstances or the interpretation of the exemption. Insurance brokers Aon Risk Solutions helped us decipher some of the more common exemptions in Cayman.
Among a long list of exemptions on many Cayman Islands health insurance policies, there is a reference to civil war or terrorism.
It’s not a clause that many employees scanning their policies would look at too closely.
The threat of war or terror attack seems a distant possibility on the balmy sun-kissed shores of these islands.
But it is one of a number of common exemptions that might be worth a second glance, says Jeanette Verhoeven, life and health specialist with insurance brokers Aon Risk Solutions.
The full text of the exclusion in a sample insurance contract reads: “Injuries or illnesses suffered due to war, declared or not declared, act of war, rebellion, revolt, terrorism, strikes, riot, civil turmoil, service in the military, domestic abuse or brawl.”
If you made it through that lengthy series of unlikely events to the last four words, you might be forgiven for being a touch concerned. Would a woman, beaten by her husband, or a bystander trampled in a bar brawl, receive insurance coverage for medical costs under this policy?
Verhoeven was not sure. Upon receipt of recent policy amendments, she sought assurances from the company on behalf of her clients and was told that for someone who was innocent and did not wilfully participate in the brawl, “concessions” would be made depending on the content of a police report and medical notes. She believes the same interpretation could be used in domestic violence cases. Where both parties were equal participants, medical bills perhaps would not be covered; where there was a clear victim, they would be covered.
Many insurers require a police report, court documents or inquest proceedings to establish the innocent party in instances of criminal injury – a common exemption designed to keep policy prices more fair by insuring reasonable behavior.
Most Cayman Islands insurance policies contain some form of exemption from coverage for anyone injured in the commission of a criminal offense. But there is serious ambiguity over how this is applied across a broad range of potential offenses.
Would a burglar breaking into a home who was attacked by the resident with a machete receive coverage? Not likely, based on several sample policies.
For someone injured in a car accident, talking on their cell phone, not wearing a seat belt or over the legal limit for drinking and driving, the picture is less clear. Even if an insurer in these circumstances did decline coverage, the Health Insurance Commission could possibly overturn that decision on appeal.
The ‘reasonable’ approach
Verhoeven accepts that insurance companies have a right to be on the lookout for possible exemptions and to test the waters on issues, including the recklessness and level of personal culpability of the insured party.
“Insurance is designed for reasonable people, for reasonable medical situations. If insurers paid out for every risk, then policy prices would be extremely high.
Another thorny issue is suicide, or more pertinently, attempted suicide.
A person determined to kill himself, or a person making a suicide attempt as a cry for help, are unlikely to have the presence of mind to first check whether their medical insurance would cover their actions.
The answer, in many cases, is that it wouldn’t. Anyone who puts a gun to his own head or takes an overdose and lives to tell the tale will likely wake up to an even harsher reality with the possible added worry and family stress of extensive medical expenses.
An exemption on one sample policy reads, “Suicide or attempted suicide. Intentionally self inflicted injuries or those inflicted by a family member. Disputes or delinquent acts in which the insured has taken part.”
The exemptions, says Verhoeven, are not always as absolute as they seem. She knows of instances where insurers have paid out in such circumstances.
“It may be that the wording is present to allow claims review and possible denial for illegal actions but may not be applied automatically and as broadly as the exclusion seems to allow,” she said.
The best advice, says Verhoeven, is to read your policy carefully, fill in your application form honestly and thoroughly with reference to pre-existing conditions, and cover your staff and your family with the best coverage you can afford. She suggests that consumers consider seeking assistance from their insurer and/or a broker to find the right policy and to assist with any escalated issues.